Did Wal-Mart Go Low-Cost on Workplace Safety, Too?

As the battle over wages at proposed Washington, D.C., stores continues to rage, Wal-Mart Inc. (NYSE:WMT) has been tagged with a fine of nearly $200K for safety violations at a store near Rochester, New York. This fine was reduced considerably, but part of the settlement package involves Wal-Mart fixing safety issues at nearly 3,000 stores that fall under the jurisdiction of the federal Occupational Safety and Health Administration (OSHA).

The OSHA issued a news release on Wednesday describing the terms of the settlement, starting with word that Wal-Mart will be improving safety conditions at the 2,857 Walmart and Sam’s Club stores under OSHA jurisdiction. The violations include issues with locking and monitoring trash compactors, as well poor training with regard to the use of hazardous chemicals.

In addition, the safety and health code violations at a Walmart Superstore in Rochester warranted a fine of $190,000, court records show. At the New York location, violations included obstructed exits, electrical hazards, machine guarding citations, and, on a more frightening note, “11 serious bloodborne pathogens citations.” That fine came down from $365,500, yet OSHA officials struck a victorious tone following the settlement.

“This settlement will help to keep thousands of exposed Wal-Mart workers safe and healthy on the job,” said Dr. David Michaels, the Assistant Secretary of Labor, in the statement. “We hope this sends a strong message that the law requires employers to provide safe working conditions…” he added. A Wal-Mart spokesperson said the company would apply the safety upgrades to all its U.S. stores.

Wal-Mart Inc. rep Randy Hargrove told USA Today the company was going above and beyond the legal action by implementing the new safety policies in all 4,691 Walmart and Sam’s Club stores in the U.S. According to sources, states could individually cite Wal-Mart for conditions not meeting their standards and force the company to update its policies. Wal-Mart appears to be getting out ahead of that.

Despite the setback with regard to the $190K fine, Wal-Mart got off somewhat cheaply in the matter. According to the court records, the company could have paid nearly double the amount in fines. Several citations (included one worker’s fall) were downgraded from “serious” to “other-than-serious” status, which reduced the cost of violations and limited the overall exposure of the corporation. As usual, Wal-Mart did not skimp on legal costs.

In fact, the settlement could be seen as a big win for the Wal-Mart legal department. Besides the enormous reduction in the fine’s amount, Wal-Mart essentially negotiated to observe basic safety standards in its U.S. stores. The dangers associated with unsupervised, open trash compactors are too numerous to mention, while the “bloodborne pathogen citations” noted at the Rochester-area store are enough to give any customer pause.

Nonetheless, Wal-Mart got the federal body off its back for the time being, though the first salvos from the OSHA were rather menacing. The high fine originally proposed reflected “the fact that several [conditions] are substantially similar to hazards identified at nine other Wal-Mart locations in New York and eight other states,” said the OSHA’s Arthur Dube in USA Today. All things considered, the deal struck will barely register in the account ledgers at Bentonville.